Tasmania's Premier is assuring rural communities that their health facilities will not be affected by budget cuts.

Lara Giddings used yesterday's community forum at Oatlands in the southern Midlands to defend budget cuts as vital for saving the state's bottom line.

But Southern Midlands Mayor Tony Bisdee asked that local services including health facilities be quarantined.

"What we do ask is that our current services are retained," he said.

Ms Giddings assured him rural health is not in the firing line.

"The real cost pressures and problems are in the major hospitals and that's where we need to drive the reform," she said.

"We're not looking at rural health facilities in that respects at all, the real cost pressures and problems are in the major hospitals and that's where we need to drive the reform."

Ms Giddings also defended the Hawthorn sponsorship deal, saying the argument it should be cut instead was a nonsense.

"We spend around three million dollars a year on that football arrangement with Hawthorn," she said.

"Let me put that into perspective for you. The hospital budgets we spend on health is about five million dollars a day. So the three million dollars we spend a year on football, would maybe get you just past lunchtime."

The State Government didn't apply to have hospital funding exempted from a system that will see GST clawed back from the state.

Last week it was revealed the state would lose some of its GST receipts in exchange for the $340-million Denison Independent Andrew Wilkie secured for the Royal Hobart Hospital.

The State Government sought and gained an exemption from the GST redistribution process for the one-off forest peace deal money, but did not seek one in this case.

Ms Giddings says Tasmania will not lose the full amount, and it was still worth seeking the funding.

But she says it will take some time for the Grants Commission to figure out just how much GST will be lost.

"And of course it also depends on what Federal funding has been provided to other states, so if the Australian Government for instance has put a couple of hundred million into a hospital in Melbourne, that may well help to even out the impact on our grants process here," she said

The Opposition Leader Will Hodgman says he does not want to see the state lose any funding of any kind.

"I want to see this state actually standing on its own two feet capable of running our health system properly and not looking to Canberra for hand outs, but we're entitled to our fair share of GST revenues and that's what Lara Giddings and the government should be fighting for," he said.